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					                    City of Springfield, Massachusetts
              Multi-Year Financial Plan (FY13-FY16)
                                       March 29, 2012




   CITY OF SPRINGFIELD


MULTI-YEAR FINANCIAL PLAN
        (FY13-FY16)




                                                     1
                                                        City of Springfield, Massachusetts
                                                  Multi-Year Financial Plan (FY13-FY16)
                                                                           March 29, 2012

TABLE OF CONTENTS

Executive Summary……………………………………………………………………………………...3

Multi-Year Financial Plan (FY13-FY16)………………………………………………………………..5
    Base Case
    Balanced Budget Cases

Policy Themes and Options……………………………………………………………………………14

Divisional Budget and Policy Options…………………………………………………………………20

Appendices
      o Reserve Funds
      o Long Term Liabilities
      o Financial Ordinances
      o Western Massachusetts Economic Forecast




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                                                              City of Springfield, Massachusetts
                                                        Multi-Year Financial Plan (FY13-FY16)
                                                                                 March 29, 2012

EXECUTIVE SUMMARY
The City of Springfield is governed by strict financial policies adopted as ordinances in
September of 2009. Section 4.44.020 (G) stipulates that “The chief administrative and financial
officer shall produce and issue a four (4) year financial plan for the city by March 30th of each
year. Said plan shall be comprised of reasonable revenue estimates and all expenditures the
city may reasonably experience during said period. All assumptions contained in the forecasts
shall be clearly presented within the forecast document.”

The following pages represent adherence to this requirement and show actual spending in
FY07, FY08, FY09, FY10, FY11, and the Adopted budget for FY12 and the draft projected
budgets for FY13, FY14, FY15, and FY16. The projected budgets for F13 through FY16 were
estimated by using appropriate and conservative assumptions for revenues and spending
including:

      Declining spending in City Departments
      3% growth in School Department spending and revenue
      4% growth in Health Insurance Costs
      Pension growth based on the current schedule adopted for FY12
      Declining property taxes
      Level collections for other local receipts
      Level collections in non-school State Aid categories

The main drivers of the projected gap for FY13 shown in the base case are a decrease in
revenue in the areas of Property Taxes, State Aid and use of reserves and an increase in
spending across all areas of the budget. The revenue assumptions include a declining use of
reserves over the next 3 years in an effort to wean the City off using one-time revenues to meet
ongoing expenses. This is known as a structural deficit. The longer term goal would be to use
reserves for only one-time costs. In addition to a declining use of reserves, Unrestricted State
Aid is declining by $2.3 million. Although the State has committed to allocating additional
unrestricted State Aid if and when the State has a year-end surplus, it is revenue that should not
officially be counted until it is allocated.

Overall, spending increase in the areas of the budget that are non-discretionary such as
employee and retiree health insurance, debt service and our annual unfunded pension liability
schedule are the drivers of the increase on the spending side. For FY13, the City’s health
insurance will remain relatively level due to low rates negotiated by the GIC. Below is a chart
that illustrates the drivers of the gap that have been described.

It should be noted that of the entire City budget, only a small portion (approximately 20%) is
discretionary in that it is not mandated by law or ordinance. Therefore, the discretionary portion
of the budget must assume all of the reductions to achieve a balanced budget. Based on these
assumptions, it is clear that spending growth will continue to outpace revenue growth for the
coming years forcing the City to develop creative solutions, reduce or eliminate programs and
services and ask the State for additional assistance to meet the core service needs that the City
provides to residents, businesses and visitors.




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                                                                      City of Springfield, Massachusetts
                                                                Multi-Year Financial Plan (FY13-FY16)
                                                                                         March 29, 2012

                                       FY12         FY13 MYFP         FY13 MYFP      FY13 v. FY12       FY13 v. FY12
                                     ADOPTED        Base Case       Balanced Case     Base Case        Balanced Case

REVENUE
Property Taxes                       164,232,988    157,203,115       157,203,115       (7,029,873)       (7,029,873)
Local Receipts                        36,341,229     34,307,682        34,707,682       (2,033,547)       (1,633,547)
State Aid - Schools                  279,124,754    290,106,708       290,106,708       10,981,954        10,981,954
State Aid - Non-Schools               51,288,096     49,298,684        51,613,891       (1,989,412)          325,795
Reserves                               6,215,955      7,000,000         7,000,000          784,045           784,045
Other Sources                          5,000,000        500,000         6,500,000       (4,500,000)        1,500,000
Total                                542,203,022    538,416,189       547,131,396       (3,786,833)        4,928,374

EXPENDITURES
City Non-Discretionary
   SCHOOLS                           330,834,330    342,759,459       342,759,459       11,925,129        11,925,129
   MUSEUM                              1,320,000      1,320,000         1,320,000              -                 -
   DEBT SERVICE                       38,189,091     38,900,598        38,189,091          711,507                 (0)
   STATE ASSESSMENTS                   2,997,635      3,045,885         3,045,885           48,250            48,250
   CONTRIBUTION RETIREMENT PENSION    23,703,102     24,585,326        24,585,326          882,224           882,224
   UNEMPLOYMENT                          475,087        475,087           475,087              -                 -
   WORKERS COMPENSATION                1,082,000      1,082,000         1,082,000              -                 -
   MEDICAL & DENTAL                    1,000,000      1,000,000         1,000,000              -                 -
   HEALTH INSURANCE - CITY            23,544,952     23,350,690        23,350,690         (194,262)         (194,262)
   NON-CONTRIB. PENSIONS                 300,000        300,000           300,000              -                 -
   CAPITAL RESERVE FUND                2,459,738      2,500,995         2,459,738           41,256                 (0)
   PARKING CONTRACT                    1,360,617      1,394,632         1,394,632           34,015            34,015
   PAY-AS-YOU-GO CAPITAL               3,018,418      2,881,615         2,881,615         (136,802)         (136,802)
   DIF Debt Service Payment              130,000        130,000           130,000              -                 -
Subtotal (Non-Discretionary)         430,414,970    443,726,287       442,973,523       13,311,317        12,558,553
% of Total                                   79%            78%               81%

City Discretionary
   City Departments                  111,163,052    121,495,375       103,857,873       10,332,323        (7,305,179)
   M.C.D.I. CONTRACT                     625,000        300,000           300,000         (325,000)         (325,000)
Subtotal (Discretionary)             111,788,052    121,795,375       104,157,873       10,007,323        (7,630,179)
% of Total                                   21%            21%               19%

Total Expenditures                   542,203,022    565,521,662       547,131,396       23,318,640         4,928,374

MYFP - Surplus / (Gap)                        (0)    (27,105,473)              (0)      (27,105,473)               0

Base Case – This year’s MYFP includes a “base case” of assumptions. The assumptions are:
    Spending – Departmental requests for level service budgets
    Revenue – The Governor’s budget proposal for State Aid, the Assessor’s assumptions
      for property taxes and level local receipts.

Balanced Case –
    Spending – Some adjustments to spending based on knowledge and departmental
      suggestions.




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                                                              City of Springfield, Massachusetts
                                                        Multi-Year Financial Plan (FY13-FY16)
                                                                                 March 29, 2012

      Revenue – Increase in local aid to account for the State surplus allocation ($2.3M),
       additional revenue from the School Department ($5M), additional revenue from the use
       of License Plate readers ($0.5M) and additional revenue from a change to the trash fee
       ($1.5M). In addition, revenue for an increase to the Hotel/Motel Tax was included
       ($0.4M) and the Fire Training facility ($1M) revenue are included in these assumptions.
      It is assumed that the remaining reductions to reach balance would come from City
       departments in the form of program and service reductions and layoffs. Specific
       programs and services have not yet been identified. Any needed reductions will be
       made based on the Mayor’s strategic priorities.

The Finance team and Departments have been working to reduce the gap between spending
and revenue for FY13. It is anticipated that all decisions made for the coming fiscal year will
only help lessen the gap in the out years and make operations more sustainable.

Additional items that are currently being considered to close the gap and achieve balance
include:
     Local Source Revenue – An increase in departmental fees in an effort to cover the cost
       of the service in areas where fees have not been updated in several years. All
       departments are evaluating fees to determine areas where increases will better cover
       the cost of the service.
     Trash Fee – A smaller bin system to reduce trash and an increase to the trash fee that,
       over several years, will fully cover the cost of trash service in the City and reduce the
       amount of trash as mandated by DEP.
     Additional Use of Reserves / State Aid Allocation / Overlay Surplus – Utilizing other one-
       time funds to help sustain or maintain core services.
     Wage Freezes – Building 0% increases into all contracts currently being negotiated.
     Departmental Reductions – Reductions that include the elimination of programs and
       services and will have impacts on staff including layoffs.
     Hotel Tax – A review of implemening the local option for the hotel tax will generate an
       additional $400K for the City.

In short, all ideas are being evaluated that will help the City achieve a balanced budget while
making every effort to maintain core services. The Mayor anticipates submitting a proposed
budget to the City Council on or about June 1, 2012.

Section 1, titled “Multi-Year Financial Plan (FY13-FY16)” includes the assumptions used to
develop this plan and provides a graphic representation of recent history of actual expenditures
and revenues, the FY12 adopted, and 2 four-year financial forecast plans for FY13 through
FY16. Scenario 1 includes a base case that outlines the gap during the projected fiscal years.
Scenario 2 is a balanced budget case that shows the adjustments needed for a balanced
budget. This graph shows that the City, despite a strong Stabilization Reserve balance and
strict financial ordinances, continues to face major budget gaps from FY13 through FY16. This
demands a proactive approach to budgeting and policy decision-making that will have impacts
on the programs and services that the City can provide.

Section 2, titled “Policy Themes and Options” discusses specific options that will govern the
decision making process. The City has compiled a list of policy decisions and suggestions from
the public gathered by email, neighborhood meetings, and the 311 Call Center. Additionally,


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                                                              City of Springfield, Massachusetts
                                                        Multi-Year Financial Plan (FY13-FY16)
                                                                                 March 29, 2012

divisional highlights and selected targeted policy measures are included. The policy decisions
presented could help minimize the forecasted budget gap, however, the options available will
require difficult decision-making by the elected leadership.

Lastly, this document includes 4 appendices; an overview of the City’s Reserve funds, an
overview of the City’s long term liabilities, a copy of the City’s adopted Financial Ordinances and
a Western MA Economic Forecast. These informational pieces provide important context for this
financial plan.




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                                                             City of Springfield, Massachusetts
                                                       Multi-Year Financial Plan (FY13-FY16)
                                                                                March 29, 2012

MULTI-YEAR FINANCIAL PLAN FY13 THROUGH FY16
The following assumptions were used for FY13 through FY16. These assumptions consider
historical revenue collections and spending and the current economic climate.

Revenue Assumptions
State Aid – In January, the Governor’s budget recommendations were released for the State’s
FY13 budget. The assumptions used in the FY13 portion of this plan reflect the Governor’s
recommendations. The Legislature may change these amounts and their budget is not due until
June of 2012. For the remaining years, in general a 1% increase in State Aid is assumed.
    Chapter 70 - The City’s largest source of state aid is Chapter 70 funds, which is devoted
       exclusively to education. Created from the Education Reform Act of 1993, the
       Commonwealth determines every municipality’s required local contribution.                A
       municipality’s local contribution, combined with its Chapter 70 aid, equals the school
       district’s net school spending requirement, the minimum the district must spend on
       education each fiscal year. The projection assumes a 3.8% increase in FY13 consistent
       with the Governor’s budget recommendations and a 3% increase in the remaining years
       of the plan.
    Charter School Tuition Reimbursements - The Commonwealth provides assistance to
       municipalities whose resident students attend charter schools. Sending districts are
       reimbursed a portion of the costs associated with students attending charter schools,
       100 percent of the tuition increase for the first year, 60 percent in the second year, and
       40 percent in the third year. The Governor’s budget assumes a 15% increase in Charter
       School reimbursements based on enrollment information. The remaining years of the
       projection assume this level remains flat.
    Unrestricted General Government Aid (UGGA) - In January of 2009, the Governor
       announced that the Commonwealth was combining Lottery Aid and Additional
       Assistance into a new state aid category, entitled Unrestricted General Government Aid.
       The Governor’s budget for FY13 assumes a 7.2% decrease, the fifth consecutive year of
       decreasing revenue, which is reflected in the FY13 assumptions for the City with a 0%
       annual growth rate in the remaining years of the plan. The State is currently working on
       a review and potential update of the formula that allocates aid to Cities and Towns and
       published reports indicate that Springfield could benefit from such an update.
    School Building Assistance Aid - The Massachusetts School Building Authority (MSBA)
       reimburses approved school building projects through School Building Assistance aid.
       This program is designed to help struggling communities keep building costs at a
       manageable level and provide students first class facilities in which to learn. These are
       the final projects statewide being funded under the “old” MSBA method. The official
       reimbursement schedule has been supplied by MSBA therefore the amounts included in
       the plan are based on that schedule.
    Other State Aid - The following are the assumptions for the other state aid categories
       Springfield receives:
           o Quinn Bill – The State eliminated its portion of funding for this program in FY12
                therefore the City has been paying the full amount of the $4 million annual
                program.
           o Veterans’ Benefits - The City receives a 75 percent reimbursement on all
                spending towards veterans’ financial, medical and burial benefits. The increase
                reflected for FY13 is consistent with the Governor’s FY13 recommendations and
                the remaining years assume a 1% annual increase.


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                                                              City of Springfield, Massachusetts
                                                        Multi-Year Financial Plan (FY13-FY16)
                                                                                 March 29, 2012

           o   Tax Exemptions - Chapter 59 of Massachusetts General Laws set a series of
               exemptions for Veterans and their surviving spouses, persons over 70 years old
               and legally blind persons. Those who meet the requirements as stated by
               Chapter 59 receive exemptions from their property taxes, ranging from $175 to
               $500. The State reimburses municipalities for these exemptions. The increase
               reflected for FY13 is consistent with the Governor’s FY13 recommendations and
               the remaining years assume a 1% annual increase. The City is currently in year 3
               of a 5-year plan to encourage more participants in this program and maximize
               the reimbursement that the State offers.
           o   The State reimburses municipalities for a portion of the taxes lost on state owned
               land.    The projection assumes level funding to the Governor’s FY13
               recommendations for the next four years.

Local Source Revenue - The remainder of revenue collected by the City is through local source
revenue, including property taxes, excise tax on motor vehicles, fees, fines and payments-in-lieu
of taxes. Over the last several years, the City made great strides in improving local source
revenue collections. These revenue sources are discussed in greater detail, as some are
relatively stable while others are cyclical with the economy.
     Property Taxes – Based on initial estimates completed by the City’s Board of Assessors,
        property taxes will decline significantly for the fifth consecutive year. The out years of
        the forecast assume little growth in this area.
     Local Receipts – In general, the forecast for Local Receipts does not substantially
        change on an annual basis unless it is affected by a legal change such as a fee or fine
        increase. All local receipts, with the exception of PILOT assume level to FY12 levels for
        the entirety of the plan. This includes motor vehicle excise, rooms occupancy tax, fees
        and fines, interest income and license and permit revenue among others.
     PILOT – The PILOT revenue assumes a gradual decline based on the agreements in
        place and their expiration dates. Some agreements may be renewed which would
        positively impact revenue collections.
     Reserves – For the purposes of the initial forecast it is assumed that $7 million in
        reserves will be used. This is about one-half of what was used in reserves in the current
        fiscal year.
     Overlay – For purposes of the initial forecast, it is assumed that $500K in overlay funding
        will be released for use in the FY13 budget.

Spending Assumptions
Overall, the projection represents level service funding for the entire forecast period. Even with
this assumption, there are still areas of the budget that continue to grow that must be
accommodated within the revenue available. The following are the assumptions for spending in
the large categories of the City’s budget:
     City Departments - The projection assumes a 0% increase for all City Departments
        which assumes that all collective bargaining contracts will have 0% built into FY13. In
        the remaining 3 years of the projection a small increase is assumed.
     School Department - The School Department projection is based on a projected
        enrollment increase and the required funding rate per student. The FY13 projection is
        based on the Governor’s budget recommendations with the remaining years assuming a
        3% annual increase. The majority of the School Department spending increase is offset
        by State Aid revenue for Schools.


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                                                          City of Springfield, Massachusetts
                                                    Multi-Year Financial Plan (FY13-FY16)
                                                                             March 29, 2012

   Debt Service - The City’s debt service is based on its current schedule plus an assumed
    3% annual growth rate to account for additional bond issuances in future years.
   Health Insurance - The City has annually saved millions by receiving its health insurance
    through the Group Insurance Commission. This financial forecast assumes an overall
    increase of 1.4% associated with health insurance for FY13 and 4% annually for the
    remaining years of the plan.
   Retirement - The retirement projection is based on the City’s most recent actuarial report
    which assumes annual increases to get to full funding by 2039.




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                                                                                                    City of Springfield, Massachusetts
                                                                                              Multi-Year Financial Plan (FY13-FY16)
                                                                                                                       March 29, 2012

MULTI-YEAR FINANCIAL PLAN (FY13-FY16) BASE CASE & BALANCED BUDGET CASE (SCENARIO 1)
                                            FY07 ACTUAL     FY08 ACTUAL       FY09 ACTUAL    FY10 ACTUAL    FY11 ACTUAL      FY12         FY13 MYFP         FY13 MYFP      FY14 MYFP         FY15 MYFP         FY16 MYFP
                                                                                                                           ADOPTED        Base Case       Balanced Case    PROJECTED         PROJECTED         PROJECTED

REVENUE
Property Taxes                               141,134,996        144,389,339    158,790,820    165,100,169    160,748,781   164,232,988    157,203,115       157,203,115      157,203,115      159,203,115       160,203,115
Local Receipts                                52,976,157         45,260,105     47,973,995     42,537,995     38,431,505    36,341,229     34,307,682        34,707,682       33,095,546       33,017,812        32,917,812
State Aid - Schools                          237,177,377        259,741,998    241,946,329    264,140,752    266,995,345   279,124,754    290,106,708       290,106,708      298,682,046      307,514,645       316,612,221
State Aid - Non-Schools                       68,076,777         68,737,284     62,144,023     51,983,004     52,629,095    51,288,096     49,298,684        51,613,891       51,610,579       50,417,330        48,551,695
Reserves                                             -                  -       11,304,220     10,000,000     13,500,000     6,215,955      7,000,000         7,000,000        3,500,000        1,000,000               -
Other Sources                                        -                  -              -        8,589,789     15,826,654     5,000,000        500,000         6,500,000        5,500,000        5,500,000         5,500,000
Total                                        499,365,307        518,128,726    522,159,387    542,351,709    548,131,380   542,203,022    538,416,189       547,131,396      549,591,286      556,652,902       563,784,843

EXPENDITURES
City Non-Discretionary
   SCHOOLS                                   274,895,677        296,909,519    282,212,288    310,099,714    320,382,859   330,834,330    342,759,459       342,759,459      353,042,242      363,633,510       374,542,515
   MUSEUM                                      1,100,000          1,320,000      1,320,000      1,320,000      1,320,000     1,320,000      1,320,000         1,320,000        1,320,000        1,320,000         1,320,000
   DEBT SERVICE                               34,399,357         39,522,411     39,231,614     38,250,684     39,047,540    38,189,091     38,900,598        38,189,091       40,067,616       41,269,645        42,507,734
   STATE ASSESSMENTS                           2,834,318          2,591,642      3,216,792      3,284,465      3,068,177     2,997,635      3,045,885         3,045,885        3,106,803        3,168,939         3,232,318
   CONTRIBUTION RETIREMENT PENSION            18,876,050         21,194,541     20,844,904     22,050,947     23,926,835    23,703,102     24,585,326        24,585,326       25,817,064       26,764,692        27,691,755
   UNEMPLOYMENT                                  420,000            110,656            -          527,421        306,900       475,087        475,087           475,087          475,087          475,087           475,087
   WORKERS COMPENSATION                              -                  -              -          962,702        995,783     1,082,000      1,082,000         1,082,000        1,000,000        1,000,000         1,000,000
   MEDICAL & DENTAL                                  -                  -              -        1,095,890      1,456,888     1,000,000      1,000,000         1,000,000        1,200,000        1,200,000         1,200,000
   HEALTH INSURANCE - CITY                    30,086,966         23,824,214     23,119,014     22,782,865     21,788,782    23,544,952     23,350,690        23,350,690       24,284,718       25,256,106        26,266,351
   NON-CONTRIB. PENSIONS                             -              490,918            -          321,734        327,259       300,000        300,000           300,000          315,000          315,000           315,000
   CAPITAL RESERVE FUND                        2,071,398                -              -        2,545,124      2,901,441     2,459,738      2,500,995         2,459,738        2,576,025        2,653,305         2,732,905
   PARKING CONTRACT                                  -              285,611      1,045,291      1,397,072      1,279,521     1,360,617      1,394,632         1,394,632        1,422,525        1,450,976         1,479,995
   PAY-AS-YOU-GO CAPITAL                             -                  -        1,285,337      3,312,791      2,121,882     3,018,418      2,881,615         2,881,615        2,939,248        2,998,032         3,057,993
   DIF Debt Service Payment                          -                  -              -          660,185        125,735       130,000        130,000           130,000          133,900          137,917           142,055
Subtotal (Non-Discretionary)                 364,683,766        386,249,512    372,275,240    408,611,594    419,049,602   430,414,970    443,726,287       442,973,523      457,700,227      471,643,209       485,963,707
% of Total                                           75%                76%            75%            78%            77%           79%            78%               81%              83%              85%               86%

City Discretionary
   City Departments                          121,511,707        124,938,685    124,916,411    117,548,099    125,313,094   111,163,052    121,495,375       103,857,873       91,591,059       85,009,693        77,821,136
   M.C.D.I. CONTRACT                             350,000                -              -        1,025,000        825,000       625,000        300,000           300,000          300,000              -                 -
Subtotal (Discretionary)                     121,861,707        124,938,685    124,916,411    118,573,099    126,138,094   111,788,052    121,795,375       104,157,873       91,891,059       85,009,693        77,821,136
% of Total                                           25%                24%            25%            22%            23%           21%            21%               19%              17%              15%               14%

Total Expenditures                           486,545,473        511,188,197    497,191,651    527,184,693    545,187,696   542,203,022    565,521,662       547,131,396      549,591,287      556,652,902       563,784,843

MYFP - Surplus / (Gap)                         12,819,834         6,940,529     24,967,736     15,167,016      2,943,684            (0)    (27,105,473)              (0)               (0)               (0)               0

Actual Stabilization Balance                                                    34,897,570     30,011,939     43,752,876       *
Estimated Stabilization Balance                                                                                             41,000,000     34,000,000        34,000,000       30,500,000       29,500,000        29,500,000
% of Budget                                                                                                                      7.56%          6.31%             6.31%            5.55%            5.30%             5.23%

*Assumes FY11 free cash is transferred and a $1M FY12 surplus




                                                                                                                                                                                                                        10
                                                                                         City of Springfield, Massachusetts
                                                                                   Multi-Year Financial Plan (FY13-FY16)
                                                                                                            March 29, 2012

MULTI-YEAR FINANCIAL PLAN (FY13-FY16) BASE CASE & BALANCED BUDGET CASE (SCENARIO 2)
                                     FY07 ACTUAL    FY08 ACTUAL    FY09 ACTUAL    FY10 ACTUAL    FY11 ACTUAL      FY12         FY13 MYFP         FY13 MYFP      FY14 MYFP         FY15 MYFP         FY16 MYFP
                                                                                                                ADOPTED        Base Case       Balanced Case    PROJECTED         PROJECTED         PROJECTED
                                                                                                                                                    (2)
REVENUE
Property Taxes                        141,134,996    144,389,339    158,790,820    165,100,169    160,748,781   164,232,988    157,203,115       157,203,115      157,203,115      159,203,115       160,203,115
Local Receipts                         52,976,157     45,260,105     47,973,995     42,537,995     38,431,505    36,341,229     34,307,682        34,707,682       33,095,546       33,017,812        32,917,812
State Aid - Schools                   237,177,377    259,741,998    241,946,329    264,140,752    266,995,345   279,124,754    290,106,708       290,106,708      298,682,046      307,514,645       316,612,221
State Aid - Non-Schools                68,076,777     68,737,284     62,144,023     51,983,004     52,629,095    51,288,096     49,298,684        51,613,891       56,610,579       60,417,330        63,551,695
Reserves                                      -              -       11,304,220     10,000,000     13,500,000     6,215,955      7,000,000         7,000,000        3,500,000        1,000,000               -
Other Sources                                 -              -              -        8,589,789     15,826,654     5,000,000        500,000         6,500,000        5,500,000        5,500,000         5,500,000
Total                                 499,365,307    518,128,726    522,159,387    542,351,709    548,131,380   542,203,022    538,416,189       547,131,396      554,591,286      566,652,902       578,784,843

EXPENDITURES
City Non-Discretionary
   SCHOOLS                            274,895,677    296,909,519    282,212,288    310,099,714    320,382,859   330,834,330    342,759,459       342,759,459      353,042,242      363,633,510       374,542,515
   MUSEUM                               1,100,000      1,320,000      1,320,000      1,320,000      1,320,000     1,320,000      1,320,000         1,320,000        1,320,000        1,320,000         1,320,000
   DEBT SERVICE                        34,399,357     39,522,411     39,231,614     38,250,684     39,047,540    38,189,091     38,900,598        38,189,091       40,067,616       41,269,645        42,507,734
   STATE ASSESSMENTS                    2,834,318      2,591,642      3,216,792      3,284,465      3,068,177     2,997,635      3,045,885         3,045,885        3,106,803        3,168,939         3,232,318
   CONTRIBUTION RETIREMENT PENSION     18,876,050     21,194,541     20,844,904     22,050,947     23,926,835    23,703,102     24,585,326        24,585,326       25,817,064       26,764,692        27,691,755
   UNEMPLOYMENT                           420,000        110,656            -          527,421        306,900       475,087        475,087           475,087          475,087          475,087           475,087
   WORKERS COMPENSATION                       -              -              -          962,702        995,783     1,082,000      1,082,000         1,082,000        1,000,000        1,000,000         1,000,000
   MEDICAL & DENTAL                           -              -              -        1,095,890      1,456,888     1,000,000      1,000,000         1,000,000        1,200,000        1,200,000         1,200,000
   HEALTH INSURANCE - CITY             30,086,966     23,824,214     23,119,014     22,782,865     21,788,782    23,544,952     23,350,690        23,350,690       24,284,718       25,256,106        26,266,351
   NON-CONTRIB. PENSIONS                      -          490,918            -          321,734        327,259       300,000        300,000           300,000          315,000          315,000           315,000
   CAPITAL RESERVE FUND                 2,071,398            -              -        2,545,124      2,901,441     2,459,738      2,500,995         2,459,738        2,576,025        2,653,305         2,732,905
   PARKING CONTRACT                           -          285,611      1,045,291      1,397,072      1,279,521     1,360,617      1,394,632         1,394,632        1,422,525        1,450,976         1,479,995
   PAY-AS-YOU-GO CAPITAL                      -              -        1,285,337      3,312,791      2,121,882     3,018,418      2,881,615         2,881,615        2,939,248        2,998,032         3,057,993
   DIF Debt Service Payment                   -              -              -          660,185        125,735       130,000        130,000           130,000          133,900          137,917           142,055
Subtotal (Non-Discretionary)          364,683,766    386,249,512    372,275,240    408,611,594    419,049,602   430,414,970    443,726,287       442,973,523      457,700,227      471,643,209       485,963,707
% of Total                                    75%            76%            75%            78%            77%           79%            78%               81%              83%              83%               84%

City Discretionary
   City Departments                   121,511,707    124,938,685    124,916,411    117,548,099    125,313,094   111,163,052    121,495,375       103,857,873       96,591,059       95,009,693        92,821,136
   M.C.D.I. CONTRACT                      350,000            -              -        1,025,000        825,000       625,000        300,000           300,000          300,000              -                 -
Subtotal (Discretionary)              121,861,707    124,938,685    124,916,411    118,573,099    126,138,094   111,788,052    121,795,375       104,157,873       96,891,059       95,009,693        92,821,136
% of Total                                    25%            24%            25%            22%            23%           21%            21%               19%              17%              17%               16%

Total Expenditures                    486,545,473    511,188,197    497,191,651    527,184,693    545,187,696   542,203,022    565,521,662       547,131,396      554,591,287      566,652,902       578,784,843

MYFP - Surplus / (Gap)                 12,819,834      6,940,529     24,967,736     15,167,016      2,943,684            (0)    (27,105,473)              (0)               (0)               (0)               0

Actual Stabilization Balance                                         34,897,570     30,011,939     43,752,876       *
Estimated Stabilization Balance                                                                                  41,000,000     34,000,000        34,000,000       30,500,000       29,500,000        29,500,000
% of Budget                                                                                                           7.56%          6.31%             6.31%            5.50%            5.21%             5.10%




                                                                                                                                                                                                             11
                                                              City of Springfield, Massachusetts
                                                        Multi-Year Financial Plan (FY13-FY16)
                                                                                 March 29, 2012

POLICY THEMES AND OPTIONS
On March 19, 2012 the City of Springfield published a draft of the Multi-Year Financial Plan
through the City’s web page. No public input was received on the draft plan.

Policy Decisions Implemented in Fiscal Year 2012:
During the development of the first plan during the FY11 and FY12 budget development
processes, ideas from both the public and internal were provided, some of which were
implemented into fiscal year plans. The following ideas have been implemented, or are
currently being implemented as part of the FY12 budget:

Public Safety
    The City’s efforts toward consolidation and civilianization have been demonstrated in the
       area of Dispatch. The City has hired a civilian Dispatch Director. This hiring is the first
       step in a process that will enable employees of the Police and Fire Departments to be
       cross-trained to answer all types of calls, thus reducing the need for two different sets of
       staff to answer emergency calls. Currently, 2 management positions are being hired to
       help with 24/7 supervision and quality control efforts.

Public Works
    The position of Solid Waste Enforcement Coordinator was hired in FY11, with funding for
       the position included in the operating budget of the Solid Waste Enterprise Fund. It is
       this employee’s goal to determine other ways to enforce the City’s rules around solid
       waste and to increase recycling throughout the City.
    The DPW’s internal milling and paving operation was reinstated in FY11. Routine
       maintenance of City streets extends their useful life, thus deferring capital maintenance
       costs without detriment to the quality of roadway surfaces.
    The Snow and Ice budget was level-funded for FY12, not increased. Increasing this line
       item would have locked the City into funding at the higher amount every year thereafter
       or jeopardized its ability to receive State funding for snow-related states of emergency.
    A comprehensive list of City employees with CDL licensure has been compiled. This list
       was utilized during the winter months in order to reduce the strain on DPW employees
       who drive both solid waste collection vehicles and winter street sanders.

Education
    During FY11 and FY12, the City has worked to consolidate certain financial functions
       including sharing a CFO / Finance Director with the School Department. Other functions
       such as information technology, human resources, purchasing, and payroll should be
       considered for consolidation efforts.

Economic Vitality
    A new Chief Development Officer has been hired to help with City-wide economic
      development efforts.
    (Public Input – FY11 Budget) - The City Council approved a transfer from the City’s
      Stabilization reserves upon request of the Mayor to lower both the residential and
      commercial tax factors for the majority of residents and businesses.
    The City Council approved a tax factor and hence tax rates which again lowered taxes
      for a majority of residents and businesses in FY12.



                                                                                                12
                                                             City of Springfield, Massachusetts
                                                       Multi-Year Financial Plan (FY13-FY16)
                                                                                March 29, 2012

Healthy Neighborhoods
    (Public Input – FY11 Budget) - The inclusion of Big Belly Solar Trash Compactors at our
       under-utilized parks will decrease labor costs incurred by emptying standard trash
       receptors on a cyclical schedule. During FY11, the Parks department received 7 big
       belly trash compactors through grant funding which have been placed throughout the
       City based on the needs of the area.

Fiscal and Operational Excellence
     (Public Input – FY12 Budget) - Review the pay scales for public employees and adjust
        where necessary to be sure public sector employees are not earning more than private
        sector employees in similar work positions. A study was completed by the Milliman
        Group that showed the areas where in fact City salaries should be increased based on
        the job duties. The results of the study have not yet been implemented.
     (Public Input – FY12 Budget) - Furlough all City employees. All non-bargaining
        employees took a 12 day furlough that was later tiered based on salary. This furlough
        only applied to non-bargaining employees. Only one union was impacted by furloughs
        whose employees accepted concessions.
     (Public Input – FY12 Budget) - Reinstate the trash fee. For FY12, the Council adopted
        the ordinance that charges $75 annually to residents who opt to use City Trash Service.
        The $3 million generated from this fee is used 100% to offset the cost of the $9 million
        solid waste budget.
     (Public Input – FY12 Budget) - Implement an "early retirement incentive program". The
        City offered a limited retirement incentive program that offered a one-time bonus of
        $6,000 to employees over the age of 60 with more than 30 years of service. 11 City
        employees opted for this benefit and retired prior to the start of FY12.
     (Public Input – FY12 Budget) - Evaluate the need for every position and layoff where
        necessary. Departments were asked to review all programs and services and
        recommend spending reductions for FY12.
     (Public Input – FY12 Budget) - No pay increase for the Mayor. The Mayor along with all
        non-bargaining employees have taken a 12 day furlough (tiered based on salary) and no
        pay raise for FY12.
     (Public Input – FY12 Budget) - Cut salaries across the board. In FY12, a 12 day
        furlough for all non-bargaining employees was instituted which effectively cut the
        salaries of these employees by 4.6%. This furlough was later adjusted to tier the
        number of furlough days by the non-bargaining employee’s salary (lower paid
        employees take fewer days). It has been a financial and morale strain for the effected
        employees.
     (Public Input – FY11 Budget) - The CAFO’s office has reviewed all organizational
        studies completed within the last five to ten years. The City is moving to implement all
        conclusions that make financial and administrative sense to follow. In addition, these
        ideas have helped form the basis for the City’s first ever Strategic Action Plan.
     (Public Input – FY11 Budget) - The City Council voted to forego one month of their
        salary in FY11, lowering their annual salary from $15,000 to $13,050.
     (Public Input – FY11 Budget) - The City continued to aggressively pursue outstanding
        real estate taxes using a Deputy Collector to focus on areas that have been previously
        difficult to collect.




                                                                                             13
                                                              City of Springfield, Massachusetts
                                                        Multi-Year Financial Plan (FY13-FY16)
                                                                                 March 29, 2012

      MUNIS, the City’s financial software, was vital to the City’s financial revival under the
       Finance Control Board.         Additional modules within MUNIS, such as contract
       management, general billing, and grants management, have been implemented
       citywide, but continual training is required to maximize employee productivity. In an
       effort to stay updated with the latest technology, the City is upgrading its MUNIS system
       in FY12 to the latest version available and will upgrade regularly in the future.
      The City completed the development of a Cost Allocation Plan which will allow the City
       to charge grants for overhead and administrative costs.
      Investment of available cash resources within the constraints of City cash management
       policies and Massachusetts General Law is being done. Any investment vehicles would
       be considered based on safety, liquidity, and yield. The City will also take into
       consideration local banks in the City of Springfield for investment purposes.

Policy Decisions Proposal for Consideration in Fiscal Year 2013 Budget
The City is currently working to develop the Fiscal Year 2013 budget recommendations and
plans to draw from the list of ideas included in this plan. All ideas will be considered and some
will ultimately be selected based upon their impact on the City’s budget and Strategic Action
Plan. The ideas immediately following are City-wide ideas that would impact many if not all
departments. Specific department ideas are included later in this report. Note that final budget
recommendations will be submitted to the Council in June 2012, therefore some items are
subject to change prior to that submission.

Operational Policy Decisions - These decisions would impact the overall operations of the City
including many if not all departmental operations.
     Evaluate all Ordinances of all Departments, identify the core mission and update or
        eliminate services based on that.
     Investigate the cost of offering a cash stipend to employees who opt out of the City’s
        health insurance plan.
     Consolidate departments or functions to increase efficiency and reduce the workforce.
     Negotiate 0% increases in all collective bargaining contract negotiations.
     Implement programmatic cuts and layoffs.
     Implement a strict hiring freeze and do not backfill any vacant positions.
     Investigate entering into a bi-weekly and paperless payroll process.
     Make modifications to Schedule 19.
     Prepare for changes needed to address long-term OPEB liability.
     Continue current enrollment in the GIC.
     Performance management - Build on our successful 311 citizen service call center by re-
        establishing our performance management function in order to conduct such critical
        activities as strategic and tactical planning, departmental performance reviews,
        neighborhood reviews, process improvement and performance reporting. These
        activities will lead to more efficient and effective service delivery and cut costs without
        negatively impacting services.

Revenue Policy Decisions – These decisions would impact the City’s ability to generate and
collect and enforce the collection of revenue.




                                                                                                14
                                                              City of Springfield, Massachusetts
                                                        Multi-Year Financial Plan (FY13-FY16)
                                                                                 March 29, 2012

      Increase the local hotel-motel tax by 2.75%, as allowed by State statute, which is an
       estimated increase in revenue for FY13 of $400K. The City must be cognizant of the
       impact on conventions and business in the City.
      Implement red light cameras when authorized by the Legislature.
      Change the CAFO’s review of local fees to an annual review to better adapt to changing
       economic conditions and implement reasonable cost adjustments and avoid larger, less-
       frequent increases.
      Work with tax exempt entities on Payment in Lieu of Taxes (PILOT) agreements.
      Implement towing of vehicles for non-payment of excise tax as authorized by the State
       Legislature and Governor.
      Pursue additional Medicaid reimbursement with the State.

Grant Policy Decisions – These policy decisions will affect how grants are sought and managed
by all City departments.
     Grant applications should be targeted toward awards that enhance the core services of
        the City and support the City’s Strategic Action Plan, not necessarily grants that add
        additional, non-essential programs or services.

Financial Reserve Policy Decisions – These policies will effect how the City utilizes its reserves
for City expenses.
     The City is required by its financial policies to have between 5-15% of General Fund
        Revenues, less debt exclusion, maintained in a stabilization reserve. This limits the
        amount of reserves available for appropriation and the use of reserves must therefore be
        the last option considered when balancing the City’s annual operating budget.
     Any future use of reserves should target non-recurring costs that support essential
        services of the City. The City should work to reduce its structural deficit.

Capital Policy Decisions – These policies will affect our Capital Plan and process for issuing
new debt to support the City’s infrastructure.
    Explore voter approval to raise taxes over its current levy limit and levy ceiling by debt
       exclusion. By doing this, the City could raise the taxes necessary to cover the debt
       service increase. This would be in effect for the life of the debt only. Reimbursements
       such as state reimbursements for school building construction are subtracted from the
       amount of the exclusion.
    Re-allocate unexpended capital proceeds of approximately $1 million.
    Continue to fund pay-go capital reserve as required by financial policy.
    Consider the use of proceeds from the prospective sale of the Fire Training facility for
       one-time expenditures.
    Use BANs and Bonds as appropriate to address the backlog of capital projects.




                                                                                               15
                                                              City of Springfield, Massachusetts
                                                        Multi-Year Financial Plan (FY13-FY16)
                                                                                 March 29, 2012

DIVISIONAL BUDGET AND POLICY OPTIONS
The following pages include specific budget and policy decisions for the City’s departments.
Implementation of these ideas will be considered on a case-by-case basis based on its impact
on the City’s budget and implementation of the City’s Strategic Action Plan.

Administration and Finance Division
The Division of Administration and Finance is responsible for the overall financial, human
capital, and technology management of the City of Springfield. Policy ideas to help address the
multi-year forecast include:
    Consolidation – The A&F Division currently has 12 Departments that should consider
        some form of restructuring / consolidation including with the School Department that
        would reduce costs or duplicated efforts.
    Performance Management – Re-constitute the City’s performance management function
        to help evaluate more efficient service delivery methods and to help cut costs without
        impacting services.
    Information Technology - Consolidate technology functions of the City, Police
        Department, Fire Department, Libraries, and School Department. This consolidation will
        reduce duplication of efforts and eliminate redundant positions through attrition.
    Information Technology – Consider regional efforts to reduce costs and improve
        services.
    Capital Asset – Consider charging costs directly to capital projects.
    Capital Asset – Consider bringing some professional services costs in house based on
        business case demonstrating cost effectiveness.

Parks, Recreation and Building Maintenance Division
The Parks, Recreation and Building Maintenance Division’s (PRBM) mission is to improve
residents’ quality of life by maintaining and improving the City’s parks and open space while
offering a diverse range of recreation programs and maintaining and improving City-owned
facilities including schools. PRBM policy decisions include:
     Reconfigure recreational program fees from a standard flat rate to an income based fee
         will generate additional revenue to cover the cost of administering recreational program.
     Increase Adult League Field Fees to generate additional revenue that could be used to
         maintain additional ball fields.
     Establish enterprise fund for golf courses.
     Consider having the School Department pay for the cost of After School programs.
     Consider bringing some additional Clean City staff on board based on business case
         demonstrating cost effectiveness.

Development Division
The Development Services Division integrates the resources of each department to enhance
the quality of life in our City, to facilitate growth and development, to ensure appropriate
planning and enforcement of regulatory standards, and to oversee and facilitate the
revitalization of each neighborhood of the City. Policy decisions for the Development Division
include:
     Offer additional Tax Incremental Financing (TIF) agreements with emerging industries
         (i.e. green technology, Brownfield redevelopment) in order to expand the City’s




                                                                                                 16
                                                              City of Springfield, Massachusetts
                                                        Multi-Year Financial Plan (FY13-FY16)
                                                                                 March 29, 2012

       economic base. While revenue would be reduced in the early years, the City’s taxable
       base would increase in future years.
      Start a “Landlord License” program to force many of the City’s landlords to maintain the
       properties that are owned.
      Increase capacity to be able to manage the Rebuild Springfield Master Plan, Union
       Station and other development efforts.
      Develop host community agreement for negotiations with prospective casino developers.

Health and Human Services Division
The Health and Human Services (“HHS”) Division serves to provide awareness of contemporary
health issues, as well as, advocate for and provide health services to the citizens of Springfield.
Policy decisions for the Health and Human Services Division include:
     Consolidate back office functions of all Health and Human Services departments,
     Animal Control – Reduce subsidy the City of Springfield is currently paying for other
        communities to be part of the regional effort by re-negotiating the per-capita rate
        charged to the current partner communities.
     Animal Control – Consider purchase of TJO building at appropriate time during extended
        lease period.
     Libraries – Reduce the number of branch libraries in the City in order to reduce costs
        and potentially provide a higher level of service in the remaining branches.
     Libraries – Regionalize the library system.

Public Works Division
The mission of the Department of Public Works (DPW) is to maintain, preserve and improve the
City of Springfield’s public way infrastructure. The DPW also manages the Solid Waste
Enterprise Fund. Policy decisions for the Public Works Division include:
     Submit a trash fee proposal to the Council and have it passed to ensure costs of the
        City’s trash services are recouped through the fee.
     Consolidate all fleet maintenance for all departments under the Fleet Maintenance
        subdivision. The Police and Fire Departments each employ a fleet manager and several
        maintenance technicians.
     Implement the Cartegraph software by all departments including DPW, Police, and Fire
        to track vehicle inventory and maintenance records.
     Conduct a thorough review of each position with access to overnight vehicle privileges.
     Consider outsourcing the fleet maintenance parts store.

Public Safety Division
The Public Safety division’s mission is to keep the citizens of Springfield safe, establish
partnerships between the public and the police in order to enhance the quality of life, law
enforcement, preservation of public peace, and providing the highest quality emergency
response and fire prevention services. Policy decisions for the Public Safety Division include:
     Consolidate the Business Offices of the Police, Fire, and Dispatch Departments.
     Review options concerning Quinn Bill payments until the State starts to reimburse the
       City.
     Adopt MA General Law Ch 41 § 111K to override the collective bargaining agreement
       and give the Fire Commissioner more flexibility in staffing. Currently, the Fire




                                                                                                  17
                                                                City of Springfield, Massachusetts
                                                          Multi-Year Financial Plan (FY13-FY16)
                                                                                   March 29, 2012

       Commissioner cannot deny a request to use vacation time unless the number of
       employees out on leave exceeds 16.
      Charge a fee for out-of-town referrals for the Fire Stop program. The Fire Stop program
       for juvenile fire-starter intervention, currently manages cases for all surrounding cities
       and towns in Western MA.
      Obtain grant funding for Centralized, and eventually Regionalized Dispatch.
      Consider purchasing chase vehicles for medical service responses.

School Department
The School Department Mission is to provide the highest quality of education so that all of our
students are empowered to realize their full potential and lead fulfilling lives as lifelong learners,
responsible citizens and leaders in the 21st century. In recent years as a result of statewide
education reform exacerbated by the Great Recession, the School Department has received
more resources each year and the City Departments have received fewer resources for
discretionary expenditures. This trend, if it continues will result in fewer resources for the City’s
core services. Policy discussions to potentially reverse this trend include:
     Modify charges to Schedule 19 and enter into service level agreements where
        appropriate.
     Minimize the cost of non-Net School Spending items such as transportation and adult
        education or make these expenses net school spending eligible.
     Consolidate back office functions between the City and School departments.
     Conduct an analysis of all Adult Basic Education programs serving Springfield residents.




                                                                                                    18
                                                               City of Springfield, Massachusetts
                                                         Multi-Year Financial Plan (FY13-FY16)
                                                                                  March 29, 2012

APPENDIX 1: RESERVE FUNDS
The City has various reserve funds some of which are designated for specific purposes and
others that can be used for operational expenses upon action by the Mayor and City Council.
After decades of certifying negative reserve fund balances, the City has certified five
consecutive years of positive reserve fund balances.

Stabilization Reserve Funds
The City’s Stabilization Reserve Fund (Fund 8213) currently has a balance of $37.6 million.
The purpose of this reserve is to provide long-term financial stability for the City while improving
its financial flexibility and credit worthiness. The City’s financial policies require the City to
maintain a stabilization reserve fund equal to between 5% and 15% of operating revenues, less
debt exclusions.

Chapter 656 Reserve Fund
Chapter 656 of the Acts of 1989 established a fiscal stability reserve fund for the City of
Springfield. The balance of this reserve is to be one percent of the gross amount raised as
shown in the assessors’ tax recapitulation sheet approved by the Department of Revenue. This
reserve is maintained in the general fund and has a balance of $5.5 million.

Self Insurance Reserve Fund
The City is self insured, meaning that it does not have property or liability insurance and pays all
damage claims without the use of insurance policies. The Self Insurance Reserve Fund (Fund
8219) is designed to provide the City financial support should a significant liability occur; this
allows the City to avoid making unplanned reductions in its operating budget or reserve funds.
The current balance of the Self Insurance Reserve Fund is $568K.

Productivity Bank Fund
The purpose of this “bank” is to distribute loans to departments to finance projects that generate
additional revenue or reduce costs. Departments are required to repay Productivity Bank loans
over five years, and departments are permitted to “gain share” in savings and additional
revenue in excess of the amounts required to repay the loan. The Productivity Bank (Fund
3415) is intended to reduce costs, increase revenue and create a cycle of innovation,
accountability and entrepreneurship across the City. The current balance is $468K.

ESCO Stabilization Reserve Fund
The Finance Control Board restructured the City’s debt portfolio in 2007 and again in 2009 to
address the City’s prior inappropriate management of debt and capital investment. As part of
the structure of the 2007 bond issuance, the Board appropriated funds into a stabilization
reserve fund to help finance a more aggressive debt schedule for the City’s energy services
contract (ESCO) debt (Fund 3267). The more aggressive debt structure has saved the City
substantial interest expenses while also helping to re-shape the City’s bond repayment plan to
allow future capital investment and prevent the “debt spikes” that were built into the City’s debt
schedule prior to 2004. The current balance of this Fund is $84K.




                                                                                                 19
                                                              City of Springfield, Massachusetts
                                                        Multi-Year Financial Plan (FY13-FY16)
                                                                                 March 29, 2012

APPENDIX 2: LONG-TERM LIABILITIES
As with any large organization long-term liabilities are continually evaluated and help drive
decisions on current year services.
    Property Tax Limitations – Property values are continuing to decline in the City. In
       addition, the City is against its levy ceiling which will not allow new growth to be counted
       into the budget.
    State Aid - The Commonwealth reduced state aid (Unrestricted General Government
       Aid) to Springfield by 30% since FY08 and the Governor’s FY13 budget proposal
       initiates a 7.2% reduction below FY12. Chapter 70 Aid continues to grow, however, so
       do our education expenses including the City’s required contribution and the non-School
       eligible spending cost for transportation. Because the City’s budget is reliant on State
       Aid for 60% of our revenues, our budget follows the same economic cycles experienced
       by the State.
    Personnel - One of the largest costs in the City’s budget is personnel. The City is able to
       manage these costs through strict control mechanisms such as the Personnel Review
       Committee. This Committee reviews every hire, backfill, and promotion prior to filling a
       vacancy and frequently drives a re-examination and modernization of departmental
       structures as part of its review. Department heads must justify and/or reaffirm the need
       for every position when a vacancy occurs. Union positions make up the majority of the
       City’s FTEs along with the need to address their annual contractual pay increases.
    Benefits - Prior to Fiscal Year 2007, the City’s health insurance costs were increasing at
       a rate of 18 percent annually. The City became the first community to join the Group
       Insurance Commission (GIC). The GIC purchases health insurance for 265,000 state
       employees and retirees and has significant purchasing power. Over the last number of
       years, GIC premiums increased at an average 3.7% annually since FY09 which is
       significant growth but much more controlled than under the previous situation.
    Retirement - Retirement benefits for local and state employees are uniform across the
       Commonwealth. Until July 2009, Chapter 32 of the Massachusetts General Laws
       required municipalities to fully fund their retirement liability by 2028. The
       Commonwealth’s Fiscal Year 2010 budget included an extension of this requirement to
       2030, and further modifications to 2040 were adopted in FY11. The City must revalue its
       schedule every 3 years and adjust the schedule accordingly. Springfield’s most recent
       actuarial valuation estimated the City’s unfunded actuarial accrued liability (UAAL) at
       $532.6 million as of January 1, 2010. Our funded status is 34.3%.
    Other Post Employment Benefits - In addition to providing pension benefits, the City
       provides health, dental, vision and life insurance to retired employees and their
       survivors, in accordance with Chapter 32 of the Massachusetts General Laws. The
       City’s OPEB unfunded actuarial accrued liability is estimated at $903.7 million as of July
       1, 2011.
    Debt Service and Capital Needs - The City has a $413 million Capital Improvement Plan
       that identifies major equipment and construction needs over the next five years. Due to
       previous deferred maintenance and the number of facilities and parks, the City has
       significant capital needs. Based on the October 2010 report entitled “Analysis of
       Outstanding Debt” we are currently evaluating our capacity to sell notes and bonds over
       the next few fiscal years.




                                                                                                20
                                         City of Springfield, Massachusetts
                                   Multi-Year Financial Plan (FY13-FY16)
                                                            March 29, 2012

APPENDIX 3: FINANCIAL ORDINANCES




                                                                         21
                                                 City of Springfield, Massachusetts
                                           Multi-Year Financial Plan (FY13-FY16)
                                                                    March 29, 2012

APPENDIX 4: WESTERN MA ECONOMIC FORECAST




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